Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) today announced its financial results for the second
quarter of 2021.
HIGHLIGHTS
- Net income of $395 million and $742 million for the three and
six months ended June 30, 2021, respectively.
- Adjusted EBITDA1 of $690 million and $1,469 million for the
three and six months ended June 30, 2021, respectively.
- Declared a distribution of $0.665 per common unit that will be
paid on August 13, 2021 to unitholders of record as of August 6,
2021.
- Reconfirmed full year 2021 distribution guidance.
- S&P Global Ratings changed the outlook on Cheniere Partners
credit rating to positive from negative in April 2021.
2021 FULL YEAR DISTRIBUTION GUIDANCE
2021
Distribution per Unit
$
2.60
-
$
2.70
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
% Change
2021
2020
% Change
Revenues
$
1,889
$
1,470
29
%
$
3,852
$
3,188
21
%
Net income
$
395
$
406
(3
)%
$
742
$
841
(12
)%
Adjusted EBITDA1
$
690
$
846
(18
)%
$
1,469
$
1,638
(10
)%
LNG exported:
Number of cargoes
87
58
50
%
176
150
17
%
Volumes (TBtu)
311
205
52
%
632
530
19
%
LNG volumes loaded (TBtu)
313
207
51
%
630
534
18
%
Net income decreased $11 million during the three months ended
June 30, 2021 as compared to the three months ended June 30, 2020,
primarily as a result of decreased total margins2 due primarily to
the non-recurrence of net accelerated revenues recognized from
cancelled LNG cargoes during the three months ended June 30, 2020
of $228 million, which was partially offset by increased revenue
from increased volume of LNG delivered between the periods.
Additionally, the decrease in net income was partially offset by
decreased loss on modification or extinguishment of debt and
decreased interest expense, net of capitalized interest.
Net income decreased by $99 million during the six months ended
June 30, 2021 from the comparable period in 2020, primarily as a
result of decreased total margins2 due primarily to the
non-recurrence of accelerated revenues recognized from cancelled
LNG cargoes during the six months ended June 30, 2020 of $244
million, which were partially offset by increased revenue from
increased volume of LNG delivered between the periods. Net income
also decreased due to increased loss on extinguishment of debt,
which was partially offset by decreased interest expense, net of
capitalized interest.
During the three and six months ended June 30, 2021, we
recognized in income 313 and 630 TBtu, respectively, of LNG loaded
from the SPL Project (defined below). Additionally, in the six
months ended June 30, 2021, we recognized in income 8 TBtu of LNG
which was procured by Sabine Pass Liquefaction, LLC (“SPL”) from
Cheniere Energy, Inc.’s Corpus Christi liquefaction facility.
During the three and six months ended June 30, 2020, we
recognized $388 million and $404 million, respectively, in LNG
revenues associated with cancelled LNG cargoes, of which $244
million would have been recognized subsequent to June 30, 2020 had
the cargoes been lifted pursuant to the delivery schedules with the
customers. LNG revenues during the three months ended June 30, 2020
excluded $16 million that would have otherwise been recognized
during the quarter if the cargoes were lifted pursuant to the
delivery schedules with the customers. We did not have any such
revenue timing impacts during the three and six months ended June
30, 2021.
KEY FINANCIAL TRANSACTIONS
Year to date, SPL has entered into a series of note purchase
agreements for the sale of approximately $347 million aggregate
principal amount of Senior Secured Notes due 2037 (the “2037 SPL
Private Placement Senior Secured Notes”) on a private placement
basis. The 2037 SPL Private Placement Senior Secured Notes are
expected to be issued in the second half of 2021, subject to
customary closing conditions, and the net proceeds are expected to
be used to refinance a portion of SPL’s outstanding 6.25% SPL
Senior Secured Notes due 2022 and related fees, costs, and
expenses. The 2037 SPL Private Placement Senior Secured Notes will
be fully amortizing, with a weighted average life of over 10
years.
SABINE PASS LIQUEFACTION PROJECT UPDATE
As of July 31, 2021, approximately 1,350 cumulative LNG cargoes
totaling over 90 million tonnes of LNG have been produced, loaded,
and exported from the SPL Project.
Construction Progress as of June 30, 2021
SPL Project
Train 6
Project Status
Under Construction
Project Completion Percentage (1)
89.6% (1)
Expected Substantial Completion
1H 2022
(1) Engineering 99.7% complete,
procurement 99.9% complete, and construction 79.3% complete
SPL Project Overview
We own natural gas liquefaction facilities consisting of five
operational liquefaction Trains and one additional Train under
construction, with a total production capacity of approximately 30
million tonnes per annum (“mtpa”) of LNG at the Sabine Pass LNG
terminal (the “SPL Project”).
DISTRIBUTIONS TO UNITHOLDERS
We declared a cash distribution of $0.665 per common unit to
unitholders of record as of August 6, 2021 and the related general
partner distribution to be paid on August 13, 2021.
INVESTOR CONFERENCE CALL AND WEBCAST
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for the second quarter 2021 on
Thursday, August 5, 2021, at 11 a.m. Eastern time / 10 a.m. Central
time. A listen-only webcast of the call and an accompanying slide
presentation may be accessed through our website at
www.cheniere.com. Following the call, an archived recording will be
made available on our website. The call and accompanying slide
presentation may include financial and operating results or other
information regarding Cheniere Partners.
1 Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
2 Total margins as used herein refers to
total revenues less cost of sales.
About Cheniere Partners
Cheniere Partners owns the Sabine Pass LNG terminal located in
Cameron Parish, Louisiana, which has natural gas liquefaction
facilities consisting of five operational liquefaction Trains and
one additional Train under construction, with a total production
capacity of approximately 30 mtpa of LNG. The Sabine Pass LNG
terminal also has operational regasification facilities that
include five LNG storage tanks, vaporizers, and two marine berths
with a third marine berth under construction. Cheniere Partners
also owns the Creole Trail Pipeline, which interconnects the Sabine
Pass LNG terminal with a number of large interstate pipelines.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Quarterly Report on Form
10-Q for the quarter ended June 30, 2021, filed with the Securities
and Exchange Commission.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements.” All statements, other than statements
of historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere Partners’ financial and operational guidance, business
strategy, plans and objectives, including the development,
construction and operation of liquefaction facilities, (ii)
statements regarding expectations regarding regulatory
authorizations and approvals, (iii) statements expressing beliefs
and expectations regarding the development of Cheniere Partners’
LNG terminal and liquefaction business, (iv) statements regarding
the business operations and prospects of third parties, (v)
statements regarding potential financing arrangements, (vi)
statements regarding future discussions and entry into contracts,
and (vii) statements regarding the COVID-19 pandemic and its impact
on our business and operating results. Although Cheniere Partners
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Cheniere Partners’ actual results could differ materially from
those anticipated in these forward-looking statements as a result
of a variety of factors, including those discussed in Cheniere
Partners’ periodic reports that are filed with and available from
the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required under the
securities laws, Cheniere Partners does not assume a duty to update
these forward-looking statements.
(Financial Tables Follow)
Cheniere Energy Partners,
L.P.
Consolidated Statements of
Income
(in millions, except per unit
data)(1)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
Revenues
LNG revenues
$
1,597
$
1,332
$
3,266
$
2,781
LNG revenues—affiliate
211
61
425
249
Regasification revenues
67
68
134
135
Other revenues
14
9
27
23
Total revenues
1,889
1,470
3,852
3,188
Operating costs and expenses
Cost of sales (excluding items shown
separately below)
888
398
1,836
1,097
Cost of sales—affiliate
12
5
54
5
Cost of sales—related party
1
—
1
—
Operating and maintenance expense
168
165
317
317
Operating and maintenance
expense—affiliate
35
48
69
81
Operating and maintenance expense—related
party
12
—
22
—
Development expense
1
—
1
—
General and administrative expense
3
8
5
10
General and administrative
expense—affiliate
21
24
42
49
Depreciation and amortization expense
138
138
277
276
Impairment expense and loss on disposal of
assets
6
—
6
5
Total operating costs and expenses
1,285
786
2,630
1,840
Income from operations
604
684
1,222
1,348
Other income (expense)
Interest expense, net of capitalized
interest
(209
)
(236
)
(426
)
(470
)
Loss on modification or extinguishment of
debt
—
(42
)
(54
)
(43
)
Other income, net
—
—
—
6
Total other expense
(209
)
(278
)
(480
)
(507
)
Net income
$
395
$
406
$
742
$
841
Basic and diluted net income per common
unit
$
0.73
$
0.78
$
1.38
$
1.62
Weighted average number of common units
outstanding used for basic and diluted net income per common unit
calculation
484.0
348.6
484.0
348.6
_________________
(1)
Please refer to the Cheniere Energy
Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended
June 30, 2021, filed with the Securities and Exchange
Commission.
Cheniere Energy Partners,
L.P.
Consolidated Balance
Sheets
(in millions, except unit
data) (1)
June 30,
December 31,
2021
2020
ASSETS
(unaudited)
Current assets
Cash and cash equivalents
$
1,239
$
1,210
Restricted cash
65
97
Accounts and other receivables, net of
current expected credit losses
285
318
Accounts receivable—affiliate
65
184
Advances to affiliate
154
144
Inventory
116
107
Current derivative assets
23
14
Other current assets
97
61
Other current assets—affiliate
1
—
Total current assets
2,045
2,135
Property, plant and equipment, net of
accumulated depreciation
16,789
16,723
Operating lease assets, net of accumulated
amortization
95
99
Debt issuance costs, net of accumulated
amortization
14
17
Derivative assets
21
11
Other non-current assets, net
159
160
Total assets
$
19,123
$
19,145
LIABILITIES AND PARTNERS’
EQUITY
Current liabilities
Accounts payable
$
16
$
12
Accrued liabilities
649
658
Accrued liabilities—related party
4
4
Current debt, net of discount and debt
issuance costs
654
—
Due to affiliates
38
53
Deferred revenue
105
137
Deferred revenue—affiliate
11
1
Current operating lease liabilities
8
7
Current derivative liabilities
21
11
Total current liabilities
1,506
883
Long-term debt, net of premium, discount
and debt issuance costs
16,935
17,580
Operating lease liabilities
87
90
Derivative liabilities
8
35
Other non-current liabilities
—
1
Other non-current
liabilities—affiliate
16
17
Partners’ equity
Common unitholders’ interest (484.0
million units issued and outstanding at both June 30, 2021 and
December 31, 2020)
805
714
General partner’s interest (2% interest
with 9.9 million units issued and outstanding at June 30, 2021 and
December 31, 2020)
(234)
(175)
Total partners’ equity
571
539
Total liabilities and partners’ equity
$
19,123
$
19,145
_________________
(1)
Please refer to the Cheniere Energy
Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended
June 30, 2021, filed with the Securities and Exchange
Commission.
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and six months ended June 30, 2021 and 2020
(in millions):
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net income
$
395
$
406
$
742
$
841
Interest expense, net of capitalized
interest
209
236
426
470
Loss on modification or extinguishment of
debt
—
42
54
43
Other income, net
—
—
—
(6
)
Income from operations
$
604
$
684
$
1,222
$
1,348
Adjustments to reconcile income from
operations to Adjusted EBITDA:
Depreciation and amortization expense
138
138
277
276
Gain from changes in fair value of
commodity derivatives, net (1)
(58
)
(9
)
(36
)
(26
)
Impairment expense and loss on disposal of
assets
6
—
6
5
Incremental costs associated with COVID-19
response
—
33
—
35
Adjusted EBITDA
$
690
$
846
$
1,469
$
1,638
(1)
Change in fair value of commodity
derivatives prior to contractual delivery or termination
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our consolidated
financial statements to assess the financial performance of our
assets without regard to financing methods, capital structures, or
historical cost basis. Adjusted EBITDA is not intended to represent
cash flows from operations or net income as defined by U.S. GAAP
and is not necessarily comparable to similarly titled measures
reported by other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management’s evaluation of financial and operating performance.
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, depreciation and
amortization, and adjusting for the effects of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance, including the effects of modification or
extinguishment of debt, impairment expense and loss on disposal of
assets, changes in the fair value of our commodity derivatives
prior to contractual delivery or termination, and non-recurring
costs related to our response to the COVID-19 outbreak which are
incremental to and separable from normal operations. The change in
fair value of commodity derivatives is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of the related item economically hedged. We believe the exclusion
of these items enables investors and other users of our financial
information to assess our sequential and year-over-year performance
and operating trends on a more comparable basis and is consistent
with management’s own evaluation of performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005114/en/
Investors Randy Bhatia
713-375-5479
Media Relations Eben Burnham-Snyder
713-375-5764 Jenna Palfrey 713-375-5491
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